Technology; Making Designer Chips On a Desktop Setup

By ANDREW POLLACK

Published: August 11, 1991

SAN JOSE, Calif.—
Computer chip manufacturing may conjure up visions of huge sterilized factories with workers toiling in white "bunny suits." But a growing number of engineers in the United States are now making integrated circuits on their own desks.

The do-it-yourself chips are known as field programmable logic devices, and they are proving to be important time savers for engineers designing computers, telephone switches, medical devices and other electronic equipment. Instead of waiting for a chip to come back from a factory, which can take weeks, engineers can produce chips in their offices or laboratories in a few minutes and try them out. If the chips don't work, the design can quickly be changed.

Such desktop silicon foundries, as they are sometimes called, promise to have as much impact on the semiconductor business as desktop publishing, using laser printers, has had on the printing business.

Field programmable chips have become perhaps the hottest products in the semiconductor business. The two San Jose companies that now lead in the business -- Xilinx Inc. and the Altera Corporation -- have grown right through the recession that is hurting most other chip companies.

"Our problem is we can't ship enough," said Rodney Smith, the chairman and chief executive of Altera. Both Xilinx and Altera will cross the $100 million sales mark this year, and their stock prices are near all-time highs. The Actel Corporation, a privately held concern in Sunnyvale, Calif., with 1990 revenues estimated at $20 million, is generally considered the No. 3 player.

But competition is heating up. Motorola Inc., the largest American semiconductor company, announced last month that it planned to get into the business. The Toshiba Corporation and other Japanese companies are also expected to enter what has been a preserve of American companies.

Several Silicon Valley startups are also taking aim at the market. They include the Quicklogic Corporation of Santa Clara, whose founders invented an early type of programmable chip, and Concurrent Logic Inc. of Sunnyvale. But entering the market might not be easy for everyone. Patents could keep out some companies. And some industry executives say the arena is already overcrowded. One vendor of programmable logic devices, International CMOS Technology, recently filed for bankruptcy protection, while another, Plus Logic, laid off half its employees and replaced its top management.

Programmable logic devices have been around since the 1970's. Among the pioneers in the field was Monolithic Memories, now part of Advanced Micro Devices, which remains a supplier. But devices sold by Xilinx, Altera and others can make more complex circuits than the early products.

Dataquest, a San Jose market-research company, estimates sales of all programmable logic devices will grow from the $828 million of 1990 to $2.2 billion in 1995. Most of the growth will be in the most complex devices, sales of which will grow from $270 million in 1990 to about $1.8 billion in 1995, a compound annual growth rate of close to 50 percent.

To produce a homemade chip, an engineer designs the circuit on a personal computer or engineering work station, usually using commercially available design software. In most systems, a blank chip is then inserted into a small box connected to the computer or work station, which programs the chip in a minute or two.

Different vendors use different technologies. In general, the blank chips, which are made in huge factories, come with logic elements set in an orderly pattern. The customization process involves connecting the logic elements into a particular arrangement.

In the Actel chip, for instance, logic elements are separated by a layer of insulation. Applying an electric charge at a particular point in effect melts the insulation, thus connecting the two elements. The company calls this technology antifuse because the jolt of electricity creates a connection instead of breaking a connection, as occurs in a fuse.

Equally important is the software that converts the engineer's design into the specific pattern of connections on the chip. It is the high software content of the business that vendors of field programmable chips hope will make it hard for others to enter the business. This software can sell for several thousand dollars. A blank chip itself costs anywhere from $1 to hundreds of dollars depending on complexity and on the technology used.

Companies that design electronic products like to make customized chips because it allows them to differentiate their products from their competitors'. Until the advent of the field programmable chips, companies wanting a customized chip used application-specific integrated circuits, or ASIC's, which are customized at a factory. The ASIC provider works with the customer to design the chip, and then it manufactures the chips to order.

But designing an ASIC can cost $25,000, and getting the chips back from the factory can take six weeks. If the chip has a mistake, getting a new one will take another six weeks.

The desktop foundries are far quicker and cheaper for producing a small number of chips. But just as a printing press produces better output than a laser printer, an ASIC factory can produce far more sophisticated chips than a desktop foundry and the chips operate faster.

For large volumes of chips -- say, more than 10,000 -- it is cheaper to use a factory, just as it is cheaper to use a printing press instead of a laser printer to print thousands of copies of a document. For that reason, some companies use field programmable chips only to produce prototypes and then use factory-produced chips in the final product.

Still, companies are willing to put up with the higher costs of field programmable chips because getting something to market quickly is crucial in an industry in which products can become obsolete in as little as a year. "Xilinx wouldn't exist if we didn't reduce time to market," said G. Wesley Patterson, executive vice president and chief operating officer of Xilinx.

Apple Computer used two Xilinx chips in prototypes of a laser printer it introduced in March. The chips performed such functions as communicating with the Macintosh and controlling memory. The Xilinx chips gave Apple "the ability to try out designs and test out designs quickly" and shaved about six months off product development time, said Rob Briody, senior engineer at Apple. Nevertheless, Apple used factory-produced chips in the final product because those chips cost less than $10 per printer compared with $80 for the two Xilinx chips.

Some field programmable chips can be changed even after they are inside the finished product. That allows electronic equipment to alter its own circuitry to suit a given task. Radius Inc. of San Jose makes a computer screen that can tilt on its side, allowing the user to have either a tall narrow screen or a low wide one. A Xilinx chip reconfigures the internal circuitry as the screen is tilted.

In the future, a scientist needing to solve a particular problem might rewire the circuitry inside a computer containing chips with such flexibility as to make it particularly fast at that problem.

Photo/Diagram: An electron microscope provides a cross section view of an antifuse (top), with two layers of silicon separated by a thin layer of insulation. A desktop operator can rupture any of the thousands of tiny insulation-guarded openings in the blank chip, allowing current to flow and creating a circuit pattern for a customized computer chip. (The Actel Corporation)